U.S. new home sales hit six-year high, Amazon (AMZN) expanding hardware lab and Walmart (WMT) opening mobile checking

Bourbon & Bayonets / Wednesday, September 24th, 2014

Markets were heading slightly higher on Wednesday after news was released that U.S. new home sales hit a six-year high in August. The Commerce Department announced that sales were up a surprising 18% to an annually adjusted rate of 504,000 units. A level this high has not been recorded since May of 2008. Last months data blew past economists’ projections of a 430,000 unit pace. The data for August was up a total of 33% over this time last year. The average price of new home sales came in at $275,600, which was up over 2% from July. New home sales account for 9.1% of the overall housing market. Dan Greenhaus, chief strategist at BTIG brokerage, said, “All is not perfect in the housing market but things are certainly better today than they were about one year ago.”

Shares of Amazon.com Inc. (AMZN) were rising slightly higher after news was released that the company would be expanding their hardware lab. The online giant has plans to grow this sector at least 27% over the next five-years, which includes hiring more staff. One of the new focuses of the unit will be testing “smart” home gadgets. The company’s Lab126 sector has announced plans to hire at least 3,757 new employees in the next five-years. This division of the business developed the Kindle and other electronics. Amazon has reported plans to invest $55 million into the operation. Kinley Pearsall, Amazon’s spokeswoman, said, “We will continue to invent and create new features, services and products, and to support this innovation. Lab126 is also growing very quickly.”

Shares of Wal-Mart Stores Inc. (WMT) were on the rise after the company announced that they would be entering into the world of mobile checking accounts. This will be another major move for Walmart to enter in the financial services sector. They have also said that they will not charge overdraft or bounced-check fees that are common practice among banking institutions. It will be called GoBank checking and they will have no minimum balance and the $8.95 monthly fee will be waived if the customer has at least a $500 direct deposit made every month. The senior vice president of services said that their customers “feel they just aren’t getting value from traditional banking because of high fees.”

That’s all for today,

Warren Gates, Normandy Research